Obama health care: Supreme Court delivers major victory for President

Barack Obama's controversial reform of America's healthcare system was approved by the US Supreme Court yesterday, cementing the central legislative pillar of his first term while enraging those seeking to oust him from the White House.

In its most significant ruling for 12 years, the Court said that the US federal government was entitled, under its power to raise taxes, to force all Americans to buy private health insurance or face fines.

Delivering a narrow opinion that sought to avoid the sharply divisive politics surrounding the law, the Court's majority said: "It is not our job to protect the people from the consequences of their political choices".

The endorsement of "Obamacare" boosted morale among the President and his allies following months of speculation that the law was likely to be struck down. Speaking at the White House, a restrained Mr Obama claimed he had taken a political hit to do the right thing for America.

"Whatever the politics, today's decision was a victory for people all over this country, whose lives will be more secure," said Mr Obama. "The highest court in the land has now spoken. We will continue to implement this law".

However, any boost to the President's re-election prospects looked likely to be matched by a redoubling of Republican efforts to unseat him after a failure to destroy his signature achievement.

"What the Court did not do on its last day in session, I will do on my first day in office as President of the United States – I will act to repeal Obamacare," he said. "If we want to get rid of Obamacare, we're going to have to replace President Obama."

The ruling was the culmination of a bitter legal battle commenced by 28 Republican-controlled states, which sued the Obama administration immediately after the March 2010 passage of the law, the Patient Protection and Affordable Care Act.

They argued that the "individual mandate" at the heart of the overhaul was unconstitutional, because the government had no right to force people to buy goods and services such as health insurance.

Most of the law is due to come into force in 2014. By compelling the young and healthy into the insurance market, it aims to reduce premiums for all and subsidise coverage for the poorest. It bans insurance firms from turning away new customers who have existing health problems.

A recent Rasmussen poll found that 54 per cent of American voters favoured its repeal, compared to 39 per cent who wanted it to remain.

The conservative-leaning Court's 5-4 ruling came as a surprise due to the sceptical tone taken during oral arguments in March by several of its nine justices, who have in recent years delivered a string of pro-business rulings that have trimmed the scope of the US government.

Even more surprising was that the four consistently liberal justices were joined in their approval of the reform by Chief Justice John Roberts, a conservative judge who was appointed by George W. Bush. Justice Anthony Kennedy, a moderate and frequently the swing vote, voted to scrap the law.

Despite their victory, the Obama administration's central legal argument in support of the law was actually rejected. Mr Obama said the reform was sanctioned under the US Constitution's "Commerce Clause", which allows the government to regulate trade between the states.

The Court said this was not so. But it said the law could survive because its threat to impose fines – of $695 (£448) or 2.5 per cent of household income, whichever is greater – on those who refuse to buy insurance meant it was effectively a tax.

"It is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without health insurance. Such legislation is within Congress's power to tax," wrote Justice Roberts.

Republicans used this unexpected decision to argue Mr Obama had increased taxes on struggling Americans, a potentially potent new line of attack.

Mitch McConnell, their Senate leader, said: "The Supreme Court has spoken: this law is a tax". He said the American people had been deceived.

Mr Obama himself previously insisted that the overhaul was not a tax.

Yesterday the President noted it was ironically Mr Romney who was the first US politician to introduce a mandate in overhauling Massachusetts's health system as governor in 2006. Mr Romney now claims he never believed it was suitable for the entire country, despite clear statements to the contrary at the time.